Poor not feeling boom's effects

The statistics stressed the fact that the boons of the growing economy are remaining largely unfelt outside of key growth industries.

By JONATHAN BECK
December 17, 2007 08:24
2 minute read.

 
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While the Israeli economy continues to grow, the conditions of an overwhelming majority of the general public remain grim, according to a report by the Adva Institute published over the weekend. The institute's study showed the rich are getting richer and the poor remain poor, while the overall number of poverty-stricken people is constantly growing. According to the study, economic growth can be gauged by examining the country's top earners; the combined wages of CEOs in the top 25 companies traded in the stock market averaged NIS 10.4 million in 2006, up from NIS 4m. In contrast, though, 18.8 percent of salaried employees were considered poor in 2006, an increase from 2004's 17%. Additionally, 32.7% earned minimum or lower than minimum wage in 2006 as compared with 2001's 29.2%. The statistics stressed the fact that the boons of the growing economy are remaining largely unfelt outside of key growth industries. The sectors that developed most in the past few years were hi-tech and financial and business-related services. The yield of traditional industries, where most employees earn lower salaries, has decreased. While the report stated that unemployment is diminishing, it pointed to serious gaps between the periphery and the financial centers. Unemployment in the Arab sector remained very high and provided some of the country's grimmest figures, with one village reaching a 20.9% unemployment rate. Meanwhile, the highest percentage of unemployment found in Jewish communities was 9.4%, reported in Kiryat Malachi. The country's lowest unemployment rate was measured in the upper-class towns of Savyon and Ramat Efal, both enjoying unemployment rates as low as 0.5%. Gaps in the educational system are also widening, according to the study. In 2006, 45.9% of teenagers were entitled to receive a matriculation degree, a drop from 49.2% and 46.4%, respectively, in 2004 and 2005. Furthermore, 13% of youths who did hold a matriculation degree still did not meet the requirements of higher education institutions. Some 56% of matriculation diploma holders from top-earning families were accepted to higher education institutions, compared with a meager 10.3% of those in the lowest earning sector. "The fact that the fruits of growth are held by only a few is testimony to the processes at work in Israel. Wealth grows this drastically only in the United States. In European countries and in Japan these things don't happen," said the report's author Dr. Shlomo Savirsky. "Our politicians have abandoned the social emphasis in their policy and say that the [economic] growth solves everything. In fact, the growth increases inequality. We can close gaps only by investing in health, education, social security and enforcement of labor laws." Savirsky added that the plight of the poor is unlikely to be solved in the coming year. "Regrettably, the 2008 budget reinforces the [negative] directions pointed out in the report," he said.

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